Globalism

Lost this week in the blizzard of a British constitutionalcrisis and an American impeachment inquiry was President Donald Trump’s speechto the UN General Assembly.

Compared to past addresses to the United Nations this onewas subdued. His language was relatively temperate, measured and verged onstatesmanlike. It was a good speech—and all the more chilling for it.

If Donald Trump has a political philosophy other than hisown person advancement it is what he terms patriotism– and others fear asnationalism–versus internationalism and globalism. This is clear from his red“Make America Great Again” baseball caps, flurry of tariffs and immigrationpolicy

Trump told the annual autumn meeting of heads of governmentand state in New York: “The future does not belong to globalism. The futurebelongs to patriots. The future belongs to sovereign and independent nations.”

In his 35 minute speech he went on to applaud Brexit, BorisJohnson, attack China’s trade policies and socialism; call for the complete isolationof Iran and Venezuela, increased spending by NATO allies, the reorganisation ofthe World Trade Organisation and refused support for any internationalorganisation that supported abortions. He finished up all of the above with theinsistence that all actions had to be made within the context of competingnational political structures.

The reason for Trump’s Darwinian approach is clear:America’s is the world’s only economic and military super power. According tothe latest IMF figures, the US produces nearly a quarter (24.4 percent) of theworld’s GDP. Its national gold reserves ( in excess of 8000 metric tonnes) aregreater than the next three largest gold reserves combined.

Trump extols the virtues of the nation state because doingso works to the advantage of America. The only way that smaller countries cancompete against American power is by organising themselves into trading blocsor pursuing a level playing field policed by international organisations suchas the World Trade Organisation. Trump does not believe in win/win or that arising tide floats all ships. He a win/lose businessman letting loose torpedoesacross the trading seas.

The US president supports Brexit because it will weaken thetrading position of both the UK and EU. EU is the world’s largest trading blocand this gives its members increased negotiating power in any trade deals. Thisis disadvantageous to the US. The break-up of the EU reduces the negotiatingpower of its constituent parts and enables to American trade negotiators todictate terms to each of the separate 28 members as well as the EU’s tradingpartners. America wins. Everyone else loses.

China, is a more difficult case, and the biggest threat toAmerican hegemony. Unlike the EU it is not a trading bloc but a national stateof the sort lauded in Trump’s UN speech. And it is enjoying a patrioticresurgence and prosperity after centuries of decline. The problem is that itslarge population (1.435 billion) and fast growing economy makes it a majorthreat to Trump’s America First policy. So he imposes punitive tariffs on Chinaand uses his UN speech to attack Beijing for intellectual property theft,dumping, currency manipulation and unfair trading practices. As with most ofhis attacks, there is an element of truth in his criticisms of the Chinese, buthis solution of ditching globalism is a dangerous one.

The fact is that we live in a globalist economy. If you wantiron ore for your steel mills it is best to have a quiet word with the Swedesor Canadians. If you need phosphates to fertilise the amber waves of grain orthe fruited plain, it is best to be nice to the Moroccans. For tin cans thinkAfrica and Australia. If you want a brick house you need sand—that probablymeans China or New Zealand. As for oil, well, just think of an unstable part ofthe world, smile nicely and thrust out a fistful of dollars.

America is not alone in its needs. Central and WesternEurope are heavily dependent on Russian natural gas. Landlocked Bolivia dependson good relations with Peru and Chile to export and import its goods by sea.Oman and Iran together control the Straits of Hormuz and the entrance to thePersian Gulf, and the Vietnamese rice paddies are at the mercy of a China thatcontrols the water flowing from the Himalayas.

Manufacturing industries of the 21st century are completelyglobal. A car’s brakes may be made in Brazil; it’s tyres in Malaysia and itscrankshaft in Lithuania before all the parts are shipped on British shipscrewed by Filipinos for assembly in Detroit. A law office may be based inLondon, but the firm’s back office is in Mumbai while the call centre is inCyprus.

This interlinking globalised trading system brings thebenefits of economic growth to every corner of the world and reduces the pricesfor consumers by insuring that the best possible production costs are achieved.It also has the effect of reducing political tensions as economicinterdependence forces countries to cooperate and avoid conflict. Trump’santi-globalist nationalism risks the opposite.

Tom Arms broadcasts on foreign affairs for US Radio, regularly contributes to Lib Dem Voice, lectures and is working on a book on Anglo—American relations which is due to be published next year.